Big Data

Nonparametric Estimation Of Marketing-Mix Effects Using A Regression Discontinuity Design

Date Added: Nov 2009
Format: PDF

We discuss how regression discontinuity designs arise naturally in settings where firms target marketing activity at consumers, and discuss how this aspect may be exploited for econometric inference of causal effects of marketing effort. The papers main insight is to use commonly observed discreteness and kinks in the heuristics by which firms target such marketing activity to consumers for nonparametric identification. Such kinks, along with continuity restrictions that are typically satisfied in marketing and industrial organization applications, are sufficient for identification of local treatment effects.